Context: At a recent meeting in Geneva, India and several other WTO members expressed concerns about the EU's new Regulation on Deforestation-Free Products (EUDR), which is set to restrict exports of certain items to the EU starting from December 30, 2024. They collectively requested a postponement of the regulation.
EU's new Regulation on Deforestation-Free Products (EUDR)
- The Regulation is part of a broader plan of actions to tackle deforestation and forest degradation first outlined in the 2019 Commission Communication on Stepping up EU Action to Protect and Restore the World’s Forests.
- This commitment was later confirmed by the European Green Deal, the EU Biodiversity Strategy for 2030 and the Farm to Fork Strategy.
- ‘Deforestation-free’ means they must not result from recent (post December 31, 2020) deforestation, forest degradation, or breaches of local environmental and social laws.
- The main driver of these processes is the expansion of agricultural land that is linked to the production of commodities like cattle, wood, cocoa, soy, palm oil, coffee, rubber, and some of their derived products, such as leather, chocolate, tyres, or furniture.
- Under the Regulation, any operator or trader who places these commodities on the EU market, or exports from it, must be able to prove that the products do not originate from recently deforested land or have contributed to forest degradation.
Objectives
The new rules aim to
- avoid that the listed products Europeans buy, use and consume contribute to deforestation and forest degradation in the EU and globally.
- reduce carbon emissions caused by EU consumption and production of the relevant commodities by at least 32 million metric tonnes a year.
- address all deforestation driven by agricultural expansion to produce the commodities in the scope of the regulation, as well as forest degradation.
India and EUDR
- India is particularly concerned as the EUDR could significantly impact its exports to the EU, estimated at $1.3 billion.
- The regulation targets seven commodities and their derivatives, potentially affecting a wide range of Indian exports such as meat products, leather, chocolate, coffee, palm oil derivatives, rubber products, soybeans, wood products, and more.
Concern over Benchmarking
- Critics, including Indonesia and India, raised concerns about the EUDR's 'benchmarking system' for categorizing regions as high-risk, medium-risk, and low-risk for deforestation.
- Confusion surrounded the categorization process, prompting questions about its rationale and conditions from India.
- Other countries criticized the one-size-fits-all approach and the lack of effective compliance support systems.
- Limited time for compliance and high costs, particularly burdensome for small producers, were highlighted as significant issues.
- The EU affirmed its determination to proceed with implementation, emphasizing reliance on scientific data and internationally recognized sources for categorizing countries.
- India emphasized the need to protect low-income farmers from the high compliance costs of the regulation.